November 5, 2006

November 5, 2006

November 5, 2006

Americans for Limited Government, the Chicago-based tax-exempt organization that bankrolled a series of controversial ballot initiatives this year, has apparently been forced to move out of Illinois because it could not comply with the state’s charity laws, the Center for Public Integrity has learned.

Americans for Limited Government, the Chicago-based tax-exempt organization that bankrolled a series of controversial ballot initiatives this year, has apparently been forced to move out of Illinois because it could not comply with the state’s charity laws, the Center for Public Integrity has learned.

Americans for Limited Government had operated from offices in Illinois since 2002, but just after the November 7 elections it quietly changed its address to the Virginia residence of one of its officers. At the same time, ALG created two new tax-exempt groups, the Sam Adams Alliance and the Sam Adams Foundation, which occupy its former Chicago address.

The chairman of Americans for Limited Government, New York political activist Howard Rich, was recently described by The Wall Street Journal as “a publicity-shy, libertarian-leaning businessman who has become the go-to man for supporters of conservative ballot initiatives.” Rich did not respond to the Center’s requests for information about the organization’s financial affairs.

In all, Americans for Limited Government spent at least $8 million in 2006 pushing takings initiatives and other ballot measures. The organization has repeatedly refused to disclose the sources of its funds.

Although charitable organizations that operate in Illinois are required to furnish state regulators with annual financial statements audited by a certified public accountant, Americans for Limited Government never did so, the Center has learned.

On September 15, Illinois Attorney General Lisa Madigan notified Americans for Limited Government that its registration under the state’s charitable solicitation laws was “delinquent and not in good standing” and that its registration would be cancelled on October 15 if it failed to file a complete annual report, including the audit.

“Upon cancellation,” Madigan’s letter said, “the file will be reviewed to determine if further action, including dissolution, appointment of new trustees, and/or court-imposed remedies and fines, are appropriate.”

Madigan sent identical warnings to ALG’s affiliate, Americans for Limited Government Foundation.

Neither organization responded to the warnings, and on October 15 the Illinois Attorney General’s office canceled their registrations as charitable organizations.

The Center previously reported that both organizations ran afoul of a different state law last year by continuing to operate in Illinois even after Secretary of State Jesse White had revoked their authority to do business there.

Financial statements filed with Illinois authorities say that Americans for Limited Government Foundation shares “common management” with more than a half-dozen of Rich’s organizations, including ALG; Legislative Education Action Drive (LEAD); Parents In Charge Foundation (formerly LEAD Foundation); U.S. Term Limits; U.S. Term Limits Foundation; Social Security Choice.org (SSC.org), and SSC.org Foundation.

Although Rich’s two new organizations, the Sam Adams Alliance and the Sam Adams Foundation, solicit contributions on their shared Internet site (which was set up by Americans for Limited Government), neither has registered with the Illinois Charitable Trust Bureau, as is required by Illinois law.